Immersed in the joy of his daughter's birth, first-time father Yang Hong spoke highly of the improved medical service he experienced in the city of Zunyi in Southwest China's Guizhou province.

"Hospitalized delivery used to take one week, but my wife was discharged from the hospital only three days after she gave birth to the baby," said Yang. "We didn't have to waste time and saved at least 2,000 yuan ($314) in hospital fees."

Zunyi was one of 16 cities chosen in February 2010 to institute reforms in its public hospitals. The State Council, or China's cabinet, passed a medical reform plan in January 2009, promising to spend 850 billion yuan by 2011 to provide universal medical service to the country's 1.3 billion people.

INITIAL SUCCESS

The hospitals that were chosen to participate in the pilot program have seen progress in the two years since the program began. Zunyi's No 1 People's Hospital, where Yang's daughter was born, is one of them

One of the reforms being made includes the introduction of "clinical pathways," a management tool used to manage healthcare quality.

The hospital has 50 beds in its obstetrics department, all of which are in high demand year-round, said He Lifang, director of the department.

"Clinical pathway management has alleviated the problem," He said.

The management system has allowed the hospital to standardize prescriptions, the length of hospital stays and doctors' therapies, increasing the turnover ratio for the hospital's beds by 20 percent, said Liu Xiaoyun, deputy director of the hospital's obstetrics and gynecology department.

Electronic medical records, high-quality nursing services and the introduction of a regional health information network are also part of the reforms being made at the hospital, said Luo Xudong, president of the hospital.

With the implement of the reforms, the hospital has seen a significant increase in the number of patients admitted and the average hospitalization time has been reduced by about 30 hours, Luo said.

UNDERLYING DIFFICULTIES

As the reforms are expanded, several underlying difficulties have emerged. Limited local finances have hampered the further implementation of the reforms, especially in less-developed western regions.

"The subsidy provided by the government is far from enough," said Luo.

Hospitals at the county level often have to contend with poor infrastructure and medical facilities.

"Advanced medical equipment is demanding for operations and physical examinations," said Jiang Dacheng, president of the People's Hospital of Zunyi.

But funding shortages have put the brakes on the expansion of the reforms, Jiang said.

Public hospitals in China enjoyed full government funding before 1985. The situation changed when public hospitals began to implement market-oriented reforms to keep pace with the development of China's market economy.

Analysts say the market-oriented reforms have improved medical services to some extent. But the fact that hospitals operate on profits made from medical services and drug prescriptions have also resulted in soaring medical costs on the part of patients.

"Most of the public hospitals in China are running in the red," said Luo. "Income from medication sales accounts for more than 45 percent of our hospital's gross income."

The pilot program has also encountered other problems, such as a shortage of skilled doctors and the absence of coordinated policy support.

The government will continue to push the reforms forward while focusing on separating medical treatment services and medication sales, said Li Ling, an expert on public hospital reform at PekingUniversity.